Sunday, December 29, 2024 | 08:40 AM ISTEN Hindi

Sensex gains 257 pts, ends above 49K; Nifty holds 14,800; Nifty Metal up 5%

Tata Steel, Hindalco, JSW Steel, Adani Ports, SBI Life, M&M, and HDFC were the top Nifty gainers

SI Reporter New Delhi

stock market, markets, bull, bear, trading, nse, bse, sensex, nifty, rally, coronavirus, covid, lockdown

9:06 AM

Pre-open session :: Sensex tops 49,100

9:05 AM

BROKERAGE VIEW :: Kotak Institutional Equities on Tata Steel

Reco: Buy | TP: Rs 1,400

Tata’s 4QFY21 EBITDA came ahead of consensus with stronger India margins. Margins were at a record high and management confirmed further sequential expansion in coming quarters based on spot spreads. Net debt reduced sharply in FY2021 and deleveraging should continue. With net debt/EBITDA <1.5X over FY2022-24E despite growth capex and lower margins, TATA’s leverage issues are now behind. We raise earnings and FV to Rs1,400 (from Rs1,100). TATA has the most attractive risk-reward within the sector and is our top pick.

9:03 AM

BROKERAGE VIEW :: Edelweiss Securities on Tata Steel

Reco: Buy | TP: Rs 1,101

Key points: 1) Higher realisation catapulted domestic EBITDA/t to record INR27,800/t. 2) Tata Steel Europe’s (TSE) EBITDA/t (adj. for carbon credit purchases) was USD92/t; 3) Debt reduction of INR200bn in Q4FY21 was ahead of our estimate.

Going ahead, we expect further improvement in performance owing to: 1) spot spreads in TSE getting reflected in contracts; 2) higher domestic/export realisation for India operations; and 3) sustained focus on deleveraging.

Further improvement in European spreads will be positive as it will improve TSE’s cash sustainability. We maintain ‘BUY/SO’ with TP of INR1,300 on 4.4x Q2FY23E EBITDA.

9:00 AM

BROKERAGE VIEW :: Antique Stock Broking on Coforge

Reco: Buy | TP: Rs 3,850

We maintain our Buy rating on Coforge and expect company to report industry leading growth in near to medium-term. We value Coforge at 30x forward PE multiple on FY23e EPS with target price to INR 3,850 (vs INR 3,300 earlier) as outlook of the company remains better than its peers with expectations of revenue growth of at-least 17% for FY22 versus average 12-15% for its mid-cap peers.

We have increased earnings estimates by 4-5% for FY22/23e; while increase valuation multiple to 30x (from 27x earlier) on improved near to medium term growth expectations.

8:58 AM

BROKERAGE VIEW :: Antique Stock Broking on Tata Steel

Reco: Buy | TP: Rs 1,385

China's withdrawal of export rebates could drive a structural change in the international steel market. This could translate into lower Chinese exports and support global steel prices for longer. International iron ore prices remain elevated which would push up the cost curve for non-integrated players. Domestic steel prices are at a discount to import parity prices allowing companies to push through price hikes. Iron ore integration in the domestic operations enables the company to capture the increase in steel prices in profits. European operations are also expected to remain profitable with an improvement in spreads.

We revise our domestic steel realization assumptions higher by 11% over FY22-FY23 leading to a revised SOTP target price of INR1,385 per share (previously INR763). We maintain our BUY rating on the stock.

8:55 AM

BROKERAGE VIEW :: Prabhudas Lilladher on CEAT

Reco: Accumulate | TP: Rs 1,472

CEAT’s 4QFY21 consol results missed our estimates, as margin came lower at 11.4% (-130bp YoY/ 340bp QoQ) led by RM headwinds and lower replacement mix. As gross margins are anticipated to remain weak in H1 due to RM inflation (+8-10% increase in Q1) and weaker mix, we expect margins to remain weak in 1QFY22.

We cut FY22/23 consol EPS by 14.1%/9.5% as we built in i) high RM cost and ii) weaker mix. However, we are positive on CEAT led by factors such as i) healthy FY22/23 outlook for PVs/CVs (accounts for ~57% of revenue), ii) continue market share gains in PVs/truck segment led by ramp up in capacities and iii) cost control measures.

Consequently, we maintain Accumulate with revised price target of Rs1,472 (earlier Rs1,667), based on 16x Mar-23 consol EPS (unchanged). CEAT trades at 18x/15x FY22/23 consol EPS (in-line with 5yr LPA).

8:52 AM

BROKERAGE VIEW :: Nirmal Bang on SRF

Reco: Accumulate | TP: Rs 6,600

SRF’s 4QFY21 performance was significantly ahead of our and consensus estimates on the back of robust growth in Chemicals and Packaging segments. Consolidated Revenue/EBITDA/APAT grew by ~40%/~78%/~96% YoY in 4QFY21. Specialty Chemicals vertical grew by ~45% in FY21 as against management’s guidance of ~25%. Strong demand from overseas markets and higher volume of key products from European clients aided this growth.

While the management has guided for ~10-15% growth in Specialty Chemicals in FY22, we believe that the lower number is a function of base effect and we do not expect demand moderation.

However, we are building in >500bps moderation in EBIT margin on account of normalization of spread in the next two years. On an overall basis, we are building in Revenue/EBITDA/APAT CAGR of 16%/19%/17% over FY21-23E.

While we remain structurally positive on the long-term prospects of the company, the stupendous rise in the share price is making us downgrade the stock from a Buy to an Accumulate with an unchanged Target Price of Rs6,600.

8:47 AM

Fuel prices :: Prices hiked for 4th straight day

Petrol price raised by 27-28 paise; Diesel by 31-33 paise

8:46 AM

NEWS ALERT :: Rajasthan imposes strict lockdown from May 10-24

>> Ban on marriage celebrations till May 31. Marriages only at home or in court with only 11 people.

>> All religious places to be shut, imposes temporary ban on large gatherings.

8:43 AM

Top stocks to watch today

Earnings Today: A total of 25 companies are slated to post their March quarter numbers today, including HDFC, UltraTech Cement, Dabur India and Kansai Nerolac Paints.

Tata Consumer Products: The company reported a consolidated net profit of Rs 53.9 crore for the March quarter of FY21 as against a net loss of Rs 76.5 crore in the same quarter during the preceding fiscal. The company’s consolidated revenue from operations for the quarter surged 26 per cent YoY to Rs 3,037.2 crore. READ MORE

8:40 AM

Bull spread strategy on Bharat Forge

Rationale:

-- We have seen long build-up in the Bharat Forge Futures during the May series till now where we have seen 7 per cent rise in the Open Interest with price rising by 7 per cent.

-- The stock's primary trend is positive where it is trading above all important moving averages. READ MORE

8:37 AM

Stocks that Osho Krishan of Anand Rathi is bullish on

BUY INFOSYS LTD | TARGET: Rs 1,450 | STOP LOSS: Rs 1,300

INFY has been trading in a narrow range for the past few trading days and has recently rebounded from the supporting trend-line on the daily chart suggesting a good opportunity to accumulate the counter from a short to medium-term perspective with a favourable risk-reward ratio. The stock is comfortably placed near its 21 DEMA indicating a positive trend accompanied by the 14 period RSI has witnessed positive crossover re-affirming the positive biases in the counter. READ MORE